Core Viewpoint - Tongling Nonferrous Metals Group Co., Ltd. focuses on copper products, which are essential materials in various industries due to their excellent conductivity, thermal conductivity, mechanical properties, and high-temperature resistance [1] Company Overview - The company's main product is copper, widely used in power electronics, real estate, transportation, consumer goods, and industrial equipment [1] - The company also produces by-products including gold, silver, sulfuric acid, and various rare metals such as platinum, palladium, and rhenium, which are indispensable materials in the industrial system [1]

1. Report Industry Investment Rating - No relevant information provided in the report. 2. Core Viewpoints of the Report - Copper prices are expected to maintain high - level volatility in the short term, with a relatively limited correction range. Attention should be paid to opportunities for going long at low prices [5][57]. 3. Summary by Directory 3.1 Report Summary - US employment data shows that in December 2025, the seasonally - adjusted non - farm employment population increased by 50,000, lower than the market expectation. The November data was revised down by 8,000 to 56,000, and the October data was further revised down. The unemployment rate in December dropped to 4.4%. The CPI in December 2025 increased by 2.7% year - on - year, and the core CPI increased by 2.6%, both remaining flat compared to the previous value. The initial jobless claims in the US last week decreased by 9,000 to 198,000, significantly lower than the market expectation [5][12]. - The US will impose a 25% import ad - valorem tariff on some imported semiconductors, semiconductor manufacturing equipment, and derivatives starting from the 15th. However, copper input materials including refined copper are not subject to the tariff, which eases the concern of copper flowing to the US and weakens the support for copper prices [12]. - In December 2025, China's CPI increased by 0.8% year - on - year, and the core CPI increased by 1.2%. The PPI decreased by 1.9% year - on - year, with a narrowing decline [13]. - China's State Council executive meeting deployed a package of policies to promote domestic demand through fiscal and financial coordination, and the central bank introduced a series of measures to support high - quality economic development. The central bank also stated that there is still room for reserve requirement ratio cuts and interest rate cuts this year [17]. 3.2 Multi - and Short - Focus - **Bullish Factors**: The tight situation of copper mines remains unchanged, and the registered warrants of LME have dropped sharply [8]. - **Bearish Factors**: The rebound of the US dollar index increases the pressure on non - ferrous metals, the macro sentiment has weakened, and the domestic social inventory of copper continues to accumulate [8]. 3.3 Data Analysis - **Copper Mine Supply**: In 2025, the global copper mine supply was severely disrupted by various events, and the supply of copper concentrates is expected to have a significant gap. The gap may further expand in 2026 and turn to a loose state in 2027 [21]. - **Copper Concentrate TC**: As of the week of January 9, the My steel standard clean copper concentrate TC weekly index was - 44.81 dollars/ton dry, down 0.08 dollars/ton dry from the previous week. The strike at the Chilean Mantoverde copper mine intensifies the market's concern about supply shortages [24]. - **Electrolytic Copper Output**: In December, the SMM China electrolytic copper output increased by 75,000 tons month - on - month, with a year - on - year increase of 7.54%. The estimated output in January 2026 was 1.1636 million tons, with a slight month - on - month decrease [28]. - **Scrap Copper Import**: In November, China's scrap copper import volume was 208,100 tons, a year - on - year increase of 19.9%. However, it is expected that the scrap copper supply will tighten in 2026 due to increased global demand [32]. - **Copper Rod Production**: In December 2025, the production of domestic copper rods decreased by 16.61% month - on - month, and the capacity utilization rate decreased. In January 2026, the production and capacity utilization rate increased slightly, but the overall increase was limited [36]. - **Refined - Scrap Copper Price Difference**: As of January 15, the refined - scrap copper price difference was around 2,950 yuan/ton, which is still at a high level, not conducive to refined copper consumption [39]. - **Copper Inventory**: Last week, LME copper inventory decreased slightly, COMEX copper inventory continued to accumulate, and SHFE copper inventory increased significantly. The domestic social inventory of electrolytic copper also accumulated [50]. - **Copper Spot Premium**: On January 15, the spot premium of Shanghai Wumaotrade 1 copper was around - 120 yuan/ton, with an expanded discount. The LME0 - 3 spot premium was around 37.6 dollars/ton, with an expanded premium [54]. 3.4 Market Outlook - Copper prices will maintain high - level volatility in the short term, with a relatively limited correction range, and attention should be paid to opportunities for going long at low prices [57].

Report Summary 1) Report Industry Investment Rating - The investment rating for the copper sector in the non - ferrous metals industry is "oscillating with a downward bias" [1] 2) Core View of the Report - The core factor driving the copper price to break through the historical high is the concern about the US imposing tariffs on refined copper in the future, which leads to the concentration of global copper liquidity in the US. At the beginning of 2026, the non - commercial long and net long positions of COMEX copper, as well as the long and net long positions of LME copper investment funds, all continued to rise. The criminal investigation of Fed Chairman Powell and the Trump administration's threat to the Fed are expected to put pressure on the Fed regarding interest rate cuts, which is beneficial to metals with strong financial attributes such as gold, silver, copper, platinum, and palladium [1] 3) Summary by Relevant Catalogs Market Review - The night - session closing price of the main copper contract CU2603 was 102,860 yuan/ton, a 0.7% decline from the previous night - session closing price. The second - main contract CU2604 closed at 103,080 yuan/ton, with a decline of 0.74%. As of 06:00 on January 16, 2026, the closing price of the COMEX copper main contract HGH26E was 5.9915 US dollars per pound (equivalent to 92,063 yuan/ton at an exchange rate of 6.9698), a 1.7% decline from the previous trading day. The LME copper main contract CA03 closed at 13,148.5 US dollars per ton (equivalent to 91,642 yuan/ton at an exchange rate of 6.9698), a 0.3% decline [1] Important Information - On January 15, Codelco announced that its Ministro Hales copper mine had obtained environmental approval, with its operating life extended to 2054 and annual production capacity increased from 170,000 tons to 200,000 tons [1] - On January 15, Goldman Sachs raised its 2026 LME copper price forecast from 11,400 US dollars per ton to 12,200 US dollars per ton [1] - On January 11, China Non - Ferrous Metal Mining (1258.HK) released a production guidance, expecting a total copper production of about 484,000 tons in 2026, including about 134,000 tons of cathode copper and about 350,000 tons of blister copper/anode copper. The main and auxiliary shafts of the southeast ore body of Zhongse Feikuang Qianbi were repaired in December 2025, and the mine resumed production on January 1, 2026 [1] - On January 13, Codelco's chairman said that the company's copper production in 2026 was expected to reach 1.344 million tons, an increase of about 10,000 tons compared to 2025 [1] Market Logic - The fear of US tariffs on refined copper led to the concentration of global copper liquidity in the US, causing the LME copper inventory in Europe to decline from nearly 70,000 tons to less than 15,000 tons since April, and the COMEX copper inventory to rise from less than 100,000 short tons to over 500,000 tons. The criminal investigation of Fed Chairman Powell and the Trump administration's threat to the Fed are expected to put pressure on interest rate cuts, which is beneficial to metals with strong financial attributes [1] Trading Strategy - There is no trading strategy provided at present [1]

Group 1 - Yunnan Copper announced that it will accept investor research on January 14 and 15, 2026, with participation from the finance department manager and securities affairs representative [1] - The company is engaging with investors through a research meeting, indicating a proactive approach to investor relations [1] Group 2 - Silver prices have surged over 80% in the last 50 days, significantly outpacing gold, suggesting a potential peak in the precious metals bull market [1] - Historical trends indicate that explosive growth in silver often signals a climax in the precious metals market, raising questions about the current market dynamics [1]

Group 1 - The domestic copper futures market is experiencing a downward trend, with the main contract closing at 103,030.00 CNY/ton, reflecting a decline of 2.26% [1] - Market sentiment has cooled due to the temporary suspension of tariffs on key minerals by the U.S., while supply concerns persist due to ongoing strikes in Chile [2] - The recent downtrend in copper prices is influenced by weak downstream consumption and increased production halts, leading to an overall surplus in the domestic market [2] Group 2 - The People's Bank of China has lowered various structural monetary policy tool rates by 0.25 percentage points, indicating potential for further rate cuts to boost market confidence [3] - The copper market narrative remains focused on tight raw material supplies, with the U.S. controlling over half of the global copper inventory, which may lead to price increases due to potential restocking behavior before and after the Spring Festival [3] - Recent declines in LME inventory suggest a potential for price increases, with the main contract expected to fluctuate between 101,000 and 105,000 CNY [3]

Core Viewpoint - Bank of America Securities predicts that 2026 will be a "Red Horse Year" for the Chinese base metals market, driven by favorable conditions for electrification and AI power infrastructure in 2023 due to factors such as a weak dollar and the US interest rate cut cycle [1] Group 1: Market Drivers - The supply of copper and aluminum remains tight [1] - Demand drivers for this year include a 10% year-on-year increase in grid investment, a 27% growth in electric vehicle battery production, a 41% increase in energy storage systems, and rising AI power demand [1] - The anti-involution policy is becoming more balanced, although recent enforcement has been weak [1] Group 2: Stock Recommendations - Preferred stocks include aluminum companies as alternative investments for AI power supply, with a forecasted price-to-earnings ratio between 8 to 10 times [1] - Positive outlook on gold, copper, lithium (including battery materials), and cobalt stocks; neutral view on coal; bearish on solar energy and construction materials (like steel) due to weak demand and declining steel profit margins [1] Group 3: Specific Stock Picks - Key stock picks include China Aluminum (601600) (02600), Zijin Mining (601899) (02899), China Hongqiao (01378), Shandong Gold (600547) (01787), and Ganfeng Lithium (002460) (01772) [1] - Underperforming stocks identified include Tongwei Co. (600438) (600438.SH), Xinyi Solar (00968), Ansteel (000898) (00347), and China Resources Cement (01313) [1]

Group 1 - The core viewpoint of the article is that 2026 is identified as the "Year of the Red Horse," which is favorable for the Chinese base metals market due to several key factors, including a weak US dollar and a US interest rate cut cycle benefiting metals [1] - Key demand drivers for this year include a 10% year-on-year increase in grid investment, a 27% growth in electric vehicle battery demand, a 41% increase in energy storage systems, and rising AI power demand [1] - Supply constraints for copper and aluminum are expected to continue, contributing to the overall market dynamics [1] Group 2 - The preferred investment stocks include aluminum companies, with a forecasted price-to-earnings ratio between 8 to 10 times, and a "buy" outlook on gold, copper, lithium (including battery materials), and cobalt stocks [1] - The company holds a neutral view on coal and a bearish outlook on solar energy and construction materials (such as steel) due to weak demand and declining steel profit margins [1] - Key stocks that are expected to underperform the market include Tongwei Co., Ltd. (600438.SH), Xinyi Solar (00968), Ansteel Group (00347), and China Resources Cement Technology (01313) [1]

Group 1 - Ivanhoe Mines has achieved its 2025 production targets for both the Kamoa-Kakula copper mine and the Kipushi zinc mine, indicating a steady recovery after a year of disruptions and significant increases in a key smelting plant's output [2] - The Kamoa-Kakula copper mine is recognized as one of the most important new copper resources globally, with a production of 388,838 tons of copper concentrate in 2025, aligning with the expected range of 380,000-420,000 tons [2][3] - The company has set its 2026 copper production guidance at 380,000–420,000 tons, with expectations for further increases due to improved access to high-grade ore and ongoing underground drainage work [3] Group 2 - A significant milestone for the company was the launch of Africa's largest copper smelting plant at the end of 2025, which currently produces an average of 500 tons of 99.7% pure anode copper daily [4] - The first batch of export products is expected to be shipped soon [5] - The anticipated copper sales volume for the Kamoa-Kakula mine in 2026 is projected to exceed production by 20,000 tons due to the consumption of unsold copper concentrate inventory [6] Group 3 - The Kipushi mine reported a record zinc concentrate production of 203,168 tons in 2025, meeting its guidance target [7] - The company has set its 2026 zinc production target between 240,000–290,000 tons, with December's production indicating an annualized output exceeding 270,000 tons [8]

1. Report Industry Investment Rating - Copper: Cautiously bullish [7] - Arbitrage: Suspended [7] - Options: Sell put options [7] 2. Core View of the Report - Although domestic demand is affected by high copper prices, subsidies for some end - products in 2026 will continue, TC is still at a low level, and mine supply is tight. It is recommended to buy on dips for hedging, with the range between 99,600 yuan/ton and 101,500 yuan/ton. Attention should be paid to the impact of Trump's tariff policy on Comex inventory [7] 3. Summary by Relevant Catalogs 3.1 Market News and Important Data 3.1.1 Futures Quotes - On January 15, 2026, the main Shanghai copper contract opened at 104,350 yuan/ton and closed at 102,810 yuan/ton, a - 1.26% decline from the previous trading day's close. The night - session main contract opened at 103,030 yuan/ton and closed at 102,860 yuan/ton, a 0.23% decline from the afternoon close [1] 3.1.2 Spot Situation - SMM 1 electrolytic copper spot quoted a premium of 80 - 320 yuan/ton to the 2601 contract, with an average premium of 200 yuan, up 60 yuan from the previous day. The spot price range was 102,160 - 102,990 yuan/ton. The main 2602 contract traded between 101,530 - 103,500 yuan/ton. The cross - month spread was between Contango 380 - 200 yuan, and the monthly import loss was about 1,560 - 1,770 yuan/ton. Shanghai's inventory increased by 17,400 tons compared to January 12, mainly in the form of warehouse receipts [2] 3.1.3 Important Information Summary - **Macro and Geopolitical**: On January 14, the US government announced that President Trump signed an executive order to impose a 25% tariff on semiconductors, semiconductor manufacturing equipment and their derivatives [3] - **Economic Data**: The number of initial jobless claims in the US last week decreased by 9,000 to 198,000, significantly lower than the market expectation of 215,000, the lowest level since November last year. The four - week moving average dropped to 205,000, a two - year low [3] - **Fed Chair News**: Trump has no plan to fire Powell, and he tends to choose the next Fed chair between Kevin Warsh and Kevin Hassett [3] 3.2 Supply - related Information 3.2.1 Mine End - Global key mineral supply chains are under increasing pressure. The demand for copper, lithium, nickel and rare earths is growing faster than new supply. About $5 trillion of cumulative investment is needed by 2035 to meet key mineral demand, and current exploration spending is 40% - 50% lower than required. The average cycle from discovery to first production is 16 years. Codelco's Ministo Hales copper mine's expansion project to extend its mining life to 2054 has obtained environmental approval, with an investment of $2.8 billion and a planned increase in annual output from 170,000 tons to 200,000 tons [4] 3.2.2 Smelting and Import - Elemental Group plans to invest $800 million in two core projects, with two - thirds for a copper smelting and refining plant and the rest for a power battery metal refinery. The projects are named "Polvolt" and have received EU and Polish government subsidies [5] 3.3 Consumption Information - China's unforged copper and copper products imports in December 2025 were 437,000 tons, up from 427,000 tons in November. The cumulative imports in 2025 were 5.321 million tons, a 6.4% year - on - year decrease [5] 3.4 Inventory and Warehouse Receipt Information - LME warehouse receipts changed by 75,000 tons to 141,125 tons compared to the previous trading day. SHFE warehouse receipts changed by 13,378 tons to 162,717 tons. On January 12, the domestic electrolytic copper spot inventory was 320,900 tons, a change of 27,500 tons from the previous week [6]

Report Summary 1. Industry Investment Rating No investment rating information is provided in the report. 2. Core View The strengthening of the US dollar restricts the upward movement of copper prices, and the trend strength of copper is neutral [1]. 3. Summary by Directory 3.1 Fundamental Tracking - **Futures Data**: The closing price of the Shanghai copper main - contract was 102,560 with a daily decline of 1.26%, and the night - session closing price was 102,860 with a night - session increase of 0.29%. The closing price of the LME copper 3M electronic disk was 13,149 with a daily decline of 1.14%. The trading volume of the Shanghai copper index was 643,234, a decrease of 48,394 from the previous day, and the position was 683,376, a decrease of 14,853. The trading volume of the LME copper 3M electronic disk was 65,624, an increase of 31,797, and the position was 326,000, an increase of 2,579 [1]. - **Inventory Data**: The Shanghai copper inventory was 162,717, an increase of 13,378, and the LME copper inventory was 141,125, a decrease of 500. The LME copper注销仓单 ratio was 35.50%, a decrease of 0.51% [1]. - **Spread Data**: The LME copper premium and discount was 44.29, a decrease of 45.94 from the previous day. The spot - to - futures near - month spread was 200, an increase of 60 from the previous day. The near - month contract to the continuous - first contract spread was - 360, an increase of 60 from the previous day [1]. 3.2 Macro and Industry News - **Macro News**: The People's Bank of China decided to lower the rediscount and re - loan interest rates by 25 basis points and stated that there is still room for reserve requirement ratio cuts and interest rate cuts this year. The US employment market remains resilient, with the number of initial jobless claims dropping to 198,000 last week, the lowest since November last year, and the US dollar rebounding to a more than one - month high [1]. - **Industry News**: Pan - Pacific Copper (PPC) proposed a copper premium of up to $330 per ton for Japanese domestic customers in 2026, a record high. Codelco's copper production in November decreased by 3% year - on - year to 130,900 tons. The US government may lift the mining ban in northern Minnesota, potentially reviving a major mining project. Codelco submitted a $1.3 billion plan to extend the life of the Radomiro Tomic copper mine to 2058. The State Grid Corporation plans to invest 4 trillion yuan during the 15th Five - Year Plan period, a 40% increase from the 14th Five - Year Plan [1][3]. 3.3 Trend Strength The trend strength of copper is 0, indicating a neutral outlook [3].